The Psychology of Price: How to use price to increase demand, profit and customer satisfaction

by Leigh Caldwell

Explaining the science behind pricing, The Psychology of Price has practical, jargon-free advice on pricing strategies and techniques that can be immediately applied. Includes a toolkit to work out the price point for any product plus expert tips to help businesses understand consumer behaviour and achieve higher sales.

Genres: Business, Psychology, Economics

249 pages, Kindle Edition

First published September 28, 2012

Reviews

[Balachandar Kaliappan · Rating 4 out of 5]

Psychology of Price is an eye opener for start ups and even established business on how to price their products. People who never got exposed to behavioural economics will find it as an enthralling journey in understanding consumer behaviour. Worthy read for marketing professors, consultants and entrepreneurs.

[T. Sathish · Rating 5 out of 5]

Terrific book..Talks about the various pricing strategy and how it influences buying decision of people..the book focuses more on retail pricing strategies and less on B2B pricing..The story of the mythical executive Maggie and her teapot pricing strategies serve as the thread holding the book..Great narration

[Rokas Golcas · Rating 4 out of 5]

The Psychology of Price" is an engaging and insightful exploration of the complex relationship between human behavior, perception of value, and price. The book is a valuable resource for anyone interested in understanding the psychological underpinnings of pricing strategies and their impact on consumer behavior.

Main Ideas:

The book delves into various concepts related to pricing strategy, such as anchoring and decoys. Anchoring is a psychological effect where a high price shown first can shift a customer's expectations about the value of a product upwards. Decoys, on the other hand, are used to encourage buyers to select a particular pricing option or to win against a competitor with different strengths and weaknesses.

The book also provides fascinating insights into how seemingly unrelated factors, like your social security number, might influence the amount you bid for a bottle of wine, or how an overpriced bowler hat could nudge you into buying a camera.

Pros:

1. The book is effortless, offering fascinating insights into human behavior and how it affects our perception of value and price.

2. It covers serious grounds of interest to product marketers, particularly those involved in pricing technology products.

3. The book provides specific guidance on applying the concepts in pricing your products and advises when the methods work best.

Cons:

1. The book's focus on pricing might not resonate with everyone, especially those more interested in other marketing or product development aspects.

2. While the book provides valuable insights, it might not offer enough depth for those looking for a more academic or detailed exploration of pricing psychology.

Additional Insights:

The book emphasizes the importance of understanding price psychology in our modern economy, where pricing strategies can significantly impact consumer behavior and business performance. It provides a valuable perspective on navigating the complex pricing landscape in various aspects of business, from consumer goods to B2B technology.

It's a must-read for marketers of consumer and business products or services and anyone interested in understanding the mind games behind pricing strategies.

[Peter P. · Rating 3 out of 5]

There's some interesting content in this book but the structure of how it was shaped - with a running story of a fictional chocolate teapot company - got tiresome for me. I don't know if it was the constant shifting of fonts and the use of bold type in the teapot story and not in the text, but I found some of those choices to be fragmented and continuously distracting. The decision to base the entire narrative around the fictituous company had a big effect on the range of price examples...don't look for much in the way of luxury goods examples.

[nicholas · Rating 5 out of 5]

brilliant.

I am already using some of the techniques in the book on my business and seeing results. I was too excited I started applying the strategies before I finished the book and tadaaa… they work like magic

[Emma Peliza · Rating 3 out of 5]

An interesting read focused on product businesses.

[Marwa]

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[Joe Mcginley · Rating 5 out of 5]

I work in a village shop , and we applied many of the author's insights to our pricing strategy, with positive results. This book would be of value to anyone who needs clarification regarding pricing strategy. I cannot recommend < the Psychology of Price> by Leigh Caldwell too highly.

[Victoria · Rating 5 out of 5]

It's a good basic book on the subject, but it is quite old, and all links mentioned do not work. This is just an introductory book, but as such, I did enjoyed it.